Lawstreet Journal

Centre Raises Foreign Direct Investment Limit in Defense from 49% to 74%, Part of new Economic Package

Lawstreet Journal 18 May 2020 9:14pm

Image courtesy: Lawstreet Journal Executive Centre Raises Foreign Direct Investment Limit in Defense from 49% to 74%, Part of new Economic Package

On Saturday, 16th May 2020, Union Finance Minister Nirmala Sitharaman announced a slew of structural reforms in eight sectors namely, minerals, coal, civil aviation sector, defense production, power distribution companies in Union Territories, atomic energy sector and space sector in the fourth tranche of the Rs. 20- lack- crore economic package announced by Prime Minister Narendra Modi on Thursday, 14th May 2020, which will be equivalent to 10% of India’s Gross Domestic Product (GDP), with an aim to bolster employment and growth. 

It was announced that the Union Government has decided to increase the Foreign Direct Investment (FDI) limit in Defense manufacturing under the automatic route from 49 percent to 74 percent. Sitharaman further announced that the central government will notify a list of weaponry and platforms banned for imports while including that such things can only be bought from India. ‘Make in India’ initiative promulgated by Prime Minister Narendra Modi is implemented while distributing the Economic Package. 

Sitharaman said, “Make- In- India for self-reliance in defense production - we will notify a list of weapons and platforms for a ban on import with year-wise timelines. There will be indigenization of imported spares,” Other major steps included a ban on import of certain defense equipment and corporatization of Defense ordinance factories. 

Further, Atomic Energy which was previously entirely in Government’s Hands will now be privatized in some parts with the introduction of the Public-Private Partnership (PPP) method. Research Reactors will be set up in PPP mode for production of medical isotopes which will… Continue Reading...


Tagged: Defence Ministry  
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